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Edited version of your written advice
Authorisation Number: 1051323195810
Date of advice: 22 December 2017
Ruling
Subject: Residency
Question 1
Were you a resident of Australia for taxation purposes for the year ended 30 June 20XX?
Answer:
Yes
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commenced on
XX/XX/XX
Relevant facts and circumstances
You entered Australia on a first year working holiday visa.
You worked in one area for a period before moving to the city.
You renewed your working holiday visa when it expired.
You worked full time for a period and then part time after that.
You met your Australian partner.
You successfully applied for a student visa to study in Australia.
Your student visa was granted and you commenced study shortly after.
You and your partner have signed a joint XX month lease for your apartment.
You have also applied to have your relationship recognised by your partner’s employer.
You intend to apply for a skilled nominated 190 visa in 20XX.
You have maintained a clear and consistent desire to be employed in Australia before, during and after the tax period.
You have a bank account in Australia.
You believe you have established a pattern of habitual behaviour since 20XX to show that you reside in Australia.
You believe you have demonstrated an intention or purpose of presence to remain in Australia with your partner.
You believe you ‘resided’ in Australia in accordance with TR 98/17.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 995-1
Income Tax Assessment Act 1936 Section 6(1)
Reasons for decision
Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes as a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936).
The terms resident and resident of Australia, in regard to an individual, are defined in subsection 6(1) of the ITAA 1936.
The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are the:
1. the residence according to ordinary concepts test;
2. the domicile/permanent place of abode test;
3. the 183 days/usual place of abode test; and
4. the Commonwealth superannuation test.
The primary test for deciding the residency status of each individual is whether they reside in Australia according to the ordinary meaning of the word resides. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established.
Where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be an Australian resident if they meet the conditions of one of the other tests.
The resides (ordinary concepts) test
The ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev. 3rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'.
Recent case law decisions have considered the following factors in relation to whether the taxpayer was a resident under the ‘resides’ test:
(i) physical presence in Australia;
(ii) nationality;
(iii) history of residence and movements;
(iv) habits and ‘mode of life’;
(v) frequency, regularity and duration of visits to Australia;
(vi) purpose of visits to or absences from Australia;
(vii) family and business ties to different countries; and
(viii) maintenance of place of abode.
These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in IT 2650 Income tax: residency - permanent place of abode outside Australia and Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia.
It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances.
In your case:
● You have lived in Australia for the period in question.
● You worked full time and then part time after that.
● You have exhibited the normal habits and ‘mode of life’ of a person residing in Australia.
Based on these facts, it is evident that you have established a connection with Australia sufficient to demonstrate that you are a resident.
Therefore you meet the requirements of the ‘resides test’ and are a resident of Australia for tax purposes.
Your residency status
As you will be a resident under the ‘resides test’ there is no need to consider the remaining three tests, and you are a resident of Australia for income tax purposes under subsection 6(1) of the ITAA 1936.